2013 Hybrid Cost of Ownership Analysis & Fuel Cost Comparison!

No need. It doesn't matter, since used car prices reflect the value remaining in the car. Depreciation over the life of the car is *exactly* the original price of the car.

 

Yes it is, much better than the Corolla.
The v is just a Prius wagon. It is about 6 inches longer overall with the other measurements being closer. Using the Matrix for both should have been done. The Venza has equal cargo space to the V, but it has nearly 10 more cubic feet in the passenger area. It's just a noticably larger car overall to be used as the comparison.

 

If the buyer is only planning to have the car for 5 years, then a TCO based on 11 years isn't going to apply to his purchase decision. Really, depreciation isn't going to be a factor to a buyer that plans to never sell or trade in the car.

 

When comparing CARS, it doesn't make any sense to assume the value of some variable, when you can just use the total, with absolutely no assumptions needed.

Sure it is! Since it is exactly the purchase price, and that is one of the most important factors. Some people might not think of it that way, but I certainly do. And I maintain that people would make better buying decisions if they did as well.

 

This was the start of this mini thread was this.

Since a single owner car for its full life isn't the norm, a period of time and/or miles is needed to calculate a TCO by a prospective buyer. Purchase price is the biggest factor. Being a safe assumption that they will get some value for the car once they have parted ways with it, a depreciation rate is needed for the model. It is not equal among all models. So it's a factor in determining if a car at the top of their price range is worth it, or is it lost cash with a model with a high depreciation rate.

Single owner car buyers care about purchase price, but have no care for depreciation rate. If all they are going to get out of the car in the end is the scrap value, how quickly its used car value plummets or not isn't a big concern.

 

5 years isn't totally crazy. Consider those who lease cars these days outnumbers those who buy. And the lease expiration or the paid off the car points often triggers an urge for something different ... new ... better or so the ads say. Though I'd prefer an interactive ability to plug in the miles per year and the years of ownership and have it compute for that.

Or for those can, just the urge triggers a different choice. My last 3 cars were sold at 70, 68 and 75k miles or so but were each ~11 years old. No financial reason for selling then, all in excellent shape. Wife wanted something new because her car had had a single failure and she didn't trust it any more (I drove it 350 miles home after the fix). I just got bored with what I had (even though one was a Porsche) and tired of juggling 3 cars around to make sure the right two were in the garage. And the Prius looked like fun.

So while we all pretend to be totally rational in our purchase and car-change decisions, it ain't necessarily so.

 

I wonder why there is shown a cost differential between the Lincoln MKZ Hybrid and the MKZ non-hybrid. I thought they were the same price. Maybe they chose to compare the V6.

 

They do cost the same, and the non-hybrid is V6 only. They are calculating fuel and maintenance costs over 5yrs/75k miles, and the resale value at the end of that time. Thus the difference.

 

Of course not, but then we should be honest and admit that the couple thousand dollar difference over 5 - 10 years becomes the excuse for the decision, not the reason.

It is just a little silly to be in this position:
"I'm bored. I'm going to spend $10,000 to flip my old(er) toy for a new(er) toy."
"You want $2,000 more for new toy 'A' over new toy 'B' ? Where is the value ? What is the ROI ? the break-even point ?"

 

No it isn't. They can just compute the TOTAL spent on a given car. This would help people who are both choosing a new car, or buying a used car. Since an assumption that people will keep a car for 5 years is just as useless (i.e. a bit) for people who plan to keep a car 4 years or 8 years, as the assumption that people will keep it for 11, why bother making that arbitrary assumption?

A much more useful metric would be TCLC (total cost for the life of the car), and an expected lifespan (in years and miles).

 

That total includes items that come up on a time or mileage interval. Which will make it misleading to a buyer not planning to keep the car for the entire length of its lifespan. The Prius will likely come out ahead of the Matrix for lifetime costs. So it will appear a better deal, but it isn't if the buyer is only going to keep it for 5 years.

Your TCLC has all the same issues as a generic TCO. An individual buyer is still going to have to work out the numbers to make those metrics apply to his specific circumstances. Since most people don't keep a car for its lifetime, and are lazy, the TCO is better.

 

Sure it is. Since a car which gets better gas mileage will be worth more on the used car market.

The amount more a rational person should be willing to pay for a car with better gas mileage is the same regardless of whether the car is used or not. It is, all things being equal, gas saved * average price of gas over the (future) time period. So a person buying a used car which will save them $2,000 over the time they will keep it should be willing to pay up to $2,000 more for the car. This means that the original buyer should be willing to pay his gas saved * average price of gas over the time period he is going to keep it + $2,000. but that is the same as gas saved * average price of gas over the life of the car.

Q.E.D.

 

There is a factor of maintenance costs in the equation too. One of my last cars cost around $1k for a brake job at 40k. No maintenance costs for a period of new car ownership versus pay for oil changes with another new car from another manufacturer is another possible factor. There are all sorts of factors. Though how you compute future maintenance costs for a new model is a mystery. I know CR does it based on the manufacturers history and expresses is as something like "based on previous models, we expect it to be ...".

 

IMO, people who buy a new car, and expect to own it for only ~5 years and 75K miles are not that interested in whether it saves or loses $500 or $1000 compared to a similar car. They are buying the car BECAUSE it is new and different. Therefore, in these cases the only comparison that makes any sense is when the exact same car is available as a hybrid or not. Comparing a similar sized car from the same company makes no sense, whether it is Prius-Corolla or another other mismatch.

Mike

 

Actually, they show $450 in the "Cost Differential" column. Wouldn't fuel and maintenance come under the "Cost of Ownership" column? And the non-hybrid version is available either with a 4-cylinder (same price as the Hybrid) or with a V6 (at extra cost).

 

Yes they were, as the c-max is the same number as the fusion, and should be higher than the mkz at $6826. This represents one of the problems with this type of analysis. Its pulling epa numbers, but YMMV. One thing that we have learned is non-hybrids especially diesels test worse than hybrids on these tests (they do better in the "real world" than on the tests versus hybrids). You can see this on fuelly or fueleconomy.gov.

Other problems are guestimates of both depreciation and future fuel costs can be way off.

My biggest problem though is it pretends that hybrids have no non monitary benefits. That is the killer one for me.

 

what about my hybrid?? it uses two kinds of fuel... AC and DC!

lets compare costs. So I have driven 42,613 miles for a about $1,016.42

now for the all gasoline counterpart, you may pick any car you want. let me know where I rank!

 

Dave, I agree the leaf has a low tco, but admit it you didn't buy it because of tco.

Unless washington is very different than texas your tco is much higher than that. It includes

1) Depreciation
2) Taxes and Fees
3) Insurance

Which is why if say a hybrid or a plug-in costs $1000 more over 5 years, it is small change if you want it. Hey your leaf may have cost much less than a car that could make you as happy. For the penny pinchers out there, a used 2007 prius may get you the lowest tco over the next 5 years ;-)

 

I don't know where they are getting that $450 number. Local dealer mark up, some feature not standard on the hybrid?
On the Lincoln site the cars have the same base price. The MKZ only has one ICE option. Previously it was just the V6. Now it's the 2.0 Ecoboost that replaced the V6 in the Fusion. I see under specifications-highlights that the V6 is listed for the AWD model, but under engine it is the Ecoboost. No matter, the hybrid isn't available with AWD, so irrelevant to the comparison.

 

depreciation due to battery degradation will be a factor. After 42,000+ miles, I have lost about 10% but EVs are tax free in the State of WA so that is not a factor and insurance is about the same